Bangladesh: PN Iyer has been appointed as the chief executive officer (CEO) of Thailand’s Siam City Cement’s operations in Bangladesh. Iyer has worked previously for ACC and Holcim. He holds qualifications with the Harvard Business School, the IMD Business School and the University of Calcutta.

Last month’s prize for the most clichéd phrases in the cement news nearly went to UK technology firm Hanhaa and its ‘internet of packaging.’ At first glance the phrase seems like a hackneyed marketing play on the ‘internet of things,’ where objects outside of normal computers start to get networked, allowing for ‘added value.’ Silly wording maybe, but the intent is serious. Tracking is a vital part of logistics for industries like cement. The investors in Hanhaa, BillerudKorsnäs, may be on to something. Indeed, in 10 years time we may be kicking ourselves that we didn’t see it.

One drawback with networking everything though is that all sorts of items start to become vulnerable to computer hacking. The famous industrial example in recent years was the so-called Stuxnet virus, an alleged attempt by US and Israeli intelligence services to physically damage parts of the Iranian nuclear industry. It was intended to damage centrifuges by looking for Programmable Logic Controllers (PLC) made by Siemens in very particular circumstances. A good overview on Stuxnet can be gained by watching Alex Gibney’s documentary ‘Zero Days.’

The problem for cement plants is that they also use PLCs for process control in common with other heavy industry. Effectively, whoever built Stuxnet has shown criminals how to attack any industrial plants that uses PLCs. Unsurprisingly, given the drip-drip of bad publicity, Siemens made a point of saying that it had gained a cybersecurity certification from TÜV SÜD, a German inspection and certification organisation, for some of its related products in late 2016.

Actual examples of cement plants being attacked are hard to find. Low-level cyber intrusions are likely to be treated akin to, say, individuals trespassing on a plant grounds and more serious incidents are probably kept quiet. ThyssenKrupp’s Industrial Solutions division, that builds cement plants amongst other things, reported that it had data stolen in an online attack from somewhere in Southeast Asia in 2016. Data espionage is one thing. Physical damage to an industrial plant is quite another. Previous to this, an unnamed German steel plant was reported to have been damaged by a systematically planned attack in 2014. Another way hackers can mess up your day is via extortion attempts or so-called ransonware attacks where systems are shut down until a ransom is paid. Recent examples of this in the wider public sphere include attempts to extort the San Francisco Municipal Railway in November 2016 and the St Louis Public Library system in January 2017. Despite shutting down their systems neither organisation paid up.

From our perspective, the Global Cement website runs using a common content management system (CMS) that runs on commonly used server software. Due to this we constantly receive low-level hacking and exploit attempts from automated scripts attempting to find weaknesses in the setup. New exploits are found, hacking attempts occur, software is updated and the cycle continues. However, the key difference between the Global Cement website and a cement producer is the turnover. A cement plant operates in millions or hundreds of millions. In this way, for hackers the return on investment of hacking an industrial plant is far higher. even if it is using limited-run proprietary software and equipment. And even if critical parts of a plant’s system are security hardened, hackers may be able to find a way in via less secure areas and then work their way across. Staff smartphones accessing a local wifi network, contractors using insecure USB drives, and hackers using social engineering techniques such as confidence tricks to gain system logins by phone are just some methods that could grant intruders digital access.

A report by Ponemon placed the average annualised cost of cyber crime to the industrial sector worldwide at US$8.05m. Although the authors point out sample size issues with their calculation, industry is the fifth most affected sector in terms of losses after finance, utilities, technology and services. Networking innovations in industry such as the ‘internet of packaging’ are potential game changers as added value from the network effect and suchlike becomes factored in. The risk though is that these kind of innovations also offer opportunities to criminals and anarchists. It’s likely only a matter of time until a serious hacking attack at a cement plant becomes public knowledge.

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Austria: Peter Oswald has been appointed as the next chief executive officer (CEO) of Mondi Group. The current CEO, David Hathorn, will retire from the role on 11 May 2017 following the group’s annual general meeting whereupon Oswald will succeed him. Subsequently Hathorn will continue to work for Mondi in an executive capacity until his retirement in February 2018.

Oswald graduated in law from the University of Vienna and in business administration from WU-Vienna Business School. He began his career with Deutsche Bank and automotive company KTM. He joined the Frantschach Group in 1992 as the head of internal audit, later becoming corporate controller. After serving as chief executive of its bag and flexibles business from 1995 to 2001, he was appointed chief executive of Mondi Packaging Europe in 2002, leading its subsequent integration with Frantschach into the new Mondi packaging division. Oswald was appointed chief executive officer of the Europe & International Division in January 2008. He is also currently serving as chairman of the Confederation of European Paper Industries.

Germany: Heribert Breuer has retired as the managing director of Allmineral. Breuer was one of the founders of the company in 1988 and he worked for it since then helping to integrate the company into Hazemag. He will be succeeded by Marco Steinberg.

Steinberg previously worked as the Vice President Global Sales & Marketing for MBE Coal & Minerals Technology, which was previously known as KHD Humboldt Wedag Coal & Minerals. His focus in the new position will be to expand the product portfolio of the subsidiary and build on technological advances.

Allmineral manufactures customised processing plants for the raw materials industry. More than 750 installations designed in Duisburg for dry and wet processing of primary and secondary raw materials are currently operating reliably and efficiently around the world.

Pakistan: Syed Jamal Shahid has retired as a director of Fauji Cement with effect from 19 January 2017. Tahir Ashraf Khan has been appointed as a director of the company with effect from 20 January 2017.

Saudi Arabia: Tabuk Cement has appointed Saeed Bin Saeed Obaid as its new chairman. He succeeds Khalid Bin Saleh Al-Shathry.

“One of the worst moments in its history.” That’s how Paulo Camillo Penna, the newly appointed president of SNIC - the Brazilian National Union of Cement Industry - described his industry last week. Few people are likely to be envying his position at the moment. As Camillo Penna went on to explain, domestic sales of cement fell by 11.7% year-on-year to 57.2Mt in 2016. He added that following capacity utilisation rates of 70% in 2015 and 57% in 2016 that he expected the rate to fall below 50% in 2017. When he said it was bad he wasn’t kidding.

Graph 1: Brazilian cement sales from 2011 to 2016. Source: SNIC.

Graph 2: Regional Brazilian cement production from 2014 to 2016. Source: SNIC.

Graph 1 illustrates how stark the decline in cement sales has been since the growth period at the start of the 2010s. Sales have fallen by 15Mt since 2014 in a country that has a production capacity of 88Mt/yr. Graph 2 presents a regional picture of sales. Note in this graph the sharp drops in sales (21%) in the southeast region of Brazil, an area that contains the key cement producing states of Minas Gerais and Rio De Janeiro. The decline in the northeast region including the state of Bahia, another key cement producing state, has been less extreme but it is still over 15%.

Votorantim, the country’s largest cement producer by production capacity, reported that its cement sale volumes fell by 6% to 26Mt in the first nine months of 2016, with declines in Brazil offset by business in other countries like the US. Its sales revenue also fell, by 7% to US$3.03bn. InterCement’s cement and clinker sales volumes fell by 16% to 11.8Mt in the first half of 2016 and its sales fell by 31% to Euro898m. As it described it, ‘the political and economic instability in Brazil in the first half, impacting on unemployment, investment and government spending, ultimately retracted the construction activity, compressing cement consumption.’ To compound these problems newly opened production capacity also ‘intensified’ competition. Later in 2016 InterCement’s parent company Camargo Corrêa was reported to be in talks to sell a minority stake in Argentina’s Loma Negra to pay off its debts from the cement business in Brazil. Finally, from an international perspective, LafargeHolcim’s global results for the first nine months of 2016 were negatively impacted by ‘challenging’ conditions in Brazil amongst other countries. It laid out an environment of reduced sales volumes and falling prices, although it said that it had used cost cutting to fight this.

Politically, the fallout from the Petrobras bribery scandal is continuing to shake out in the construction industry. In October 2016 it was revealed that the Brazilian Development Bank BNDES had frozen loan payments to construction firms involved in overseas projects worth up to US$7bn, including Camargo Corrêa. The Brazilian economy is expected to grow modestly, at a rise of 0.5% gross domestic product (GDP) in 2017 after dropping in 2016 although this forecast was falling towards the end of 2016. More hopeful news came from the São Paulo state construction union, SindusCon-SP, that in December 2016 released a report forecasting that the construction industry’s output could rise by 0.5%. However, this was dependent on economic reforms.

The question for Camillo Penna and the rest of the Brazilian cement industry is: where exactly is the bottom of the curve? SNIC forecast that cement sales will contract by a further 5 – 7% in 2017 and this is below the 11.7% drop experienced in 2016. So, does SNIC think that the industry is starting to hit against a bedrock of demand that economic headwinds can’t shift? In this kind of environment it seems likely to expect increased merger and acquisition activity. The merger of Brazil’s Magnesita and Austria’s RHI refractory companies that was announced in the autumn of 2016 may just be the start.

Taiwan: Leslie Koo, the chairman of Taiwan Cement, has died from injuries sustained from a fall. Koo, aged 62 years, died on 23 January 2017 following suffering head injuries from falling down stairs at a hotel in Taipei whilst attending a wedding, according to the Tapei Times newspaper. He had led Taiwan Cement since 2003.

Nelson Chang has been appointed as the acting chairman of Taiwan Cement. Chang is Koo’s brother-in-law. He has also been appointed temporary chairman of two subsidiaries: China Synthetic Rubber and Taiwan Prosperity Chemical.

With president-elect Trump due to take office this week we wonder what this means for the cement industry in Mexico. In 2016 this column looked a couple of times at the implications of Trump upon the US cement industry. First, we looked at who might benefit if he builds his wall along the Mexican border and then we wondered what his policies might mean for the US industry. To answer the latter first, the main issues for the US industry are infrastructure, changes to the Environment Protection Agency (EPA) and the repercussions if Trumps serious about a trade war with China. So long as a trade war doesn’t happen then Trump is probably good news for the US cement industry. As for Mexico, the joke has been that Trump will be good for the construction business ever since market analysts Bernstein’s passed a note around in the summer of 2016 about that wall.

Graph 1: Breakdown of Mexican cement industry by production capacity. Source: Global Cement Directory 2017.

The makeup of the domestic Mexican cement industry hasn’t changed too much in the last decade, even with the merger between Lafarge and Holcim, preserving the same market share in production capacity between the companies. Most of the producers have reported growth in 2016. Cemex reported that its cement sales volumes rose by 3% for the first nine months of 2016 and by 10% in the third quarter of that year. Overall though, its net sales fell slightly to US$2.16bn in the first nine months, alongside a fall in ready-mix concrete sales volumes. Cemex, crucially, also seems to have taken charge of its debts in 2016, saying that it was on track to meet its targets and that it had announced nearly US$2bn worth of divestments in that year. Currently the company is trying to buy out Trinidad Cement in the Caribbean, which may be a sign that it has turned a corner.

Grupo Cementos de Chihuahua’s (GCC) cement sales volumes rose in the first three quarters of 2016, in its case by 4%. Its overall net sales in Mexico rose by 4.2% in Mexican Pesos for the same period but fell when calculated in US Dollars due to currency variations. GCC attributed its sales growth to better pricing environment and increased cement volumes, mainly for projects in the commercial and industrial sectors that compensated for a decline in the public sector, following the culmination of two major urban paving and highway construction projects in 2015. At the smaller end of the market, Elementia reported that its cement sales skyrocketed by 30% to US$104m in the first nine months of the year aided by higher prices and volumes.

The major Mexican cement producers all have a presence in the US with the exception of Cruz Azul. Cemex has held assets north of the border for years, Cemento Portland Moctezuma has links to Buzzi Unicem, GCC bought US assets from Cemex in 2016 and Elementia completed its purchase of Giant Cement also in 2016. These companies have clinker in their kilns in plants on US soil manned by US citizens. This represents investment in local industry and it is exactly the kind of thing that appeals to the rhetoric of Trump’s approach so far. If the new president builds his wall then Mexican producers will probably be producing much of the cement that builds it. Even the Mexican Peso’s slow decline since 2014 could help the local cement industry, as it will cut the cost of moving exports and materials north of the border. Indeed, Enrique Escalante, the chief executive officer of GCC said in late 2016 that his company was ‘ready to build’ Trump’s wall.

However, the sheer uncertainty factor of an incoming president with as little experience of public office as Donald Trump must be giving chief executives pause for thought. After all, Trump's tweets before he has assumed office have forced car manufacturers to change policy. If he manages to disrupt the North American Free-Trade Agreement (NAFTA) in order to protect US jobs then the repercussions for the Mexican economy will be profound. It sends nearly three quarters of its exports to the US. Local cement producers would surely suffer in the resulting economic disruption.

So, currency devaluations aside, Mexican producers are making money from their cement operations at home and they are increasingly hedging their bets by operating or buying units in the US. Some, like GCC, are even being ebullient about the benefits that might come their way. It may be a bumpy ride but the Mexican industry is ready. However, it may wish to avoid appearing in any of Donald Trump’s tweets anytime soon.

Belgium: Philippe César has been appointed member of the board of directors of Compagnie des Ciments Belges (CCB), a company acquired and added to the Cementir Group’s consolidation in October 2016. He will also be appointed as the chairman of CCB’s board of directors.